Banapana » corporations

Defend Against Black Swans

Russell Warner — Mon, 20 Apr 2009 00:19:51 +0000

I think this could be compressed into five principles, but Nassim Nicholas Taleb over at Financial Times has presented “Ten principles for a Black Swan-proof world.” For those that don’t know, Taleb coined the term black swan event to discuss unpredicted and abnormal events.¹ I couldn’t agree with him more. Making institutions larger simply increases the risk to society at large and increasing the opportunity for black swan event to be catastrophic. And our country has become plagued by behemoths. I mean, why can Aptera build an affordable aerodynamic electric car, while GM, Ford and Chrysler struggle with cars that get 30 miles per gallon? I think the benefits of scale can become outweighed by an inability to innovate and maneuver. As many pundits have been saying, we’ve taken the worst aspects of socialism and capitalism and combined them to create a bizarre corporate welfare state. It could get worse though, is the amazing thing. William Greider argues just that point in a column at the Washington Post. I was disturbed in particular by this paragraph:

“A new regulatory regime that puts the secretive central bank in charge of everything would sanctify the policy of “too big to fail” that Fed officials have long followed but never honestly acknowledged. It would also revive the Wall Street club, albeit smaller than before, with which the Fed has been so cozy. If the largest bank holding companies are given privileged proximity to the source of government protection, then everyone in finance and commerce will want to become a bank holding company, too. We are already seeing this happening as former investment houses like Goldman Sachs and non-bank financial firms decide to join the system. Why not General Electric and Microsoft? Where does this end? What does it mean for smaller enterprises that lack the scale and influence?”

The idea of a corporate state like the kind Greider is driving at is damn frightening. Regulation might bandage the wound today and in the near future, but the real problem is a market structure that persistently creates oligopolies. It stifles innovation and drives prices up. We need corporate reform.

For nearly 1500 years, it was an accepted idea that black swans did not exist. Black swans were “rediscovered” in Australia during the 18th century; hence the term black swan now indicates an unusual or hard to predict occurrence. ↩

New Category

Russell Warner — Sat, 20 Sep 2008 22:59:25 +0000

This week ad last have seen some pretty strange things going on with advertising, and even though I generally put posts on advertising into the Mind Control section of the sight (because it is all just propaganda) it seems to me that it would be a good idea to introduce a new section: Fabertising. That’s Fab- as in fabrication and -ertising as in you know, “shoving bullshit down your throat.” I would love to call the section bullshitising, but the icon for that would be grisly. I think there’s enough manipulation of the facts in commercially developed communications directed at the public that focusing on it should generate more than a few worthy posts. I’m also going to put summations of research here on how exactly advertising manipulates you into bad choices.

What!?

Russell Warner — Fri, 15 Aug 2008 05:04:00 +0000

“I have a lot of faith in the corporate world because it’s always gonna be there so you may as well have faith in it because if you don’t then that’s just not good.”

- Luke McCabe, Professional Moron

I just got finished watching “The Corporation,” which deserves an entire post unto itself, but first this. In the movie are featured two doe-eyed teenagers from California who actually got FirstUSA to sponsor them to go to college. It was during an interview with the two that McCabe stated the above. Let’s parse this statement, shall we? First let’s break it down into some simpler fragments:

I possess faith in the corporate world
The corporate world is always going to be there
You should have faith in the corporate world
Not possessing faith in the corporate world is bad

The first thing that struck about this young shill’s statement is that he used a religiously heavy word with regard to businesses. Wikipedia says “Faith is a belief in the trustworthiness of an idea.” So, to rid ourselves of the epistemological difficulty of thinking that it’s possible to not believe that corporations exist, let’s use the word “trust.”

I trust the corporate world.
The corporate world deserves this trust by existing in perpetuity.
You should trust the corporate world.
Not trusting the corporate world is bad.

You could take statements 1 and 3 and combine them since they are both advocating the same thing: we should trust the corporate world, and this is really the conclusion.

The corporate world deserves our trust by existing in perpetuity.
Not trusting the corporate world is bad.
We should trust the corporate world.

Boy has this kid drank the kool-aid. The University of Southern California clearly had its work cut out for them.